As per the report, Income tax can be reduced from 20% to 10% on income from Rs 5 lakh to 10 lakh. The govt may make the announcement before Diwali.
New Delhi| The growing Economic Slowdown has cast a shadow on the household income, consumption. The govt has introduced several measures to battle it. However, the biggest boost might be announced soon in the form of slash in the income tax rates. According to a report in Business Standard, government may reduce the income tax rates before Diwali. As per the report, tax can be reduced from 20% to 10% on income from Rs 5 lakh to 10 lakh. On income above Rs 10 lakh, it is possible to reduce it from 30% to 25%. The option to remove the cess and surcharge is also being considered. Also, some tax exemption options can also be eliminated.
Taskforce suggests income above Rs 2 crore is taxed at 35%: report
According to the report, the government will take into consideration the recommendations of the Task Force on Direct Tax Code while taking the decision. The task force had submitted the report to the government recently. 35% tax was suggested for those with income above Rs 2 crore.
Current Rate of Income Tax (Assessment Year 2019-20)
Income slab Tax rate
2.5 Lakh –
2.5 lakh to 5 lakh 5%
5 Lakhs to 10 Lakhs 20%
More than 10 Lakhs 30%
Full rebate on taxable income up to 5 lakhs
In the interim budget presented in February, the government announced a complete tax exemption through rebate on taxable income up to Rs 5 lakh. That is, if there is such income, it will be necessary to fill the returns, but the tax will be exempt. This exemption will be available while filing the return for the current financial year 2019-20 (the assessment year 2020-21).
The government also reduced corporate tax last month
It is being told that the government may announce a cut in income tax to speed up the economic growth rate. This will lead to more saving with people, they will spend more and the economy will accelerate. The government had last month announced a reduction in corporate tax from 30% to 22% for domestic companies, provided the companies are not taking any further exemption.